Definition
Equity Release is the process by which a startup or business owner can extract value from their company without selling it, often through debt instruments convertible into equity.
Usage and Context
Business owners use equity release to get cash from their company. They can do this by taking on debt that might become part of the company`s ownership later. It`s a flexible way to fund growth without giving up control immediately.
Frequently asked questions
What happens to convertible note if startup fails? If a startup fails, the convertible note can become worthless. The owner might not have to pay it back, but investors could lose their money.

What is convertible debt in a startup? Convertible debt is a loan a startup can get. It starts as debt but can turn into ownership shares in the company later on.

Can I sell my convertible note? Yes, you can sell your convertible note. But, finding a buyer depends on how attractive your startup is to investors.
Related Software
-
Benefits
Equity release gives cash flow without selling your company. It`s good for short-term needs and lets owners keep control.
Conclusion
Equity release is a smart way for owners to fund their startup. It offers cash without losing ownership, with the potential to convert debt into shares later.
cta
Connect with the world’s top investors to raise capital for yourStart free trial